article Income Tax

Tax Audit Limit for Assessment year 2022-23

CA Ramesh Kumar Sankhla

Tax Audit Limit for Assessment year 2022-23

There is two type of Audit  generally speaking.

Audit required under Companies A ct 2013

Audit required under Income Tax Act 1961

Here we will discuss about audit required under  Income Tax Act.

Under section 44AB of the Income Tax Act, every person carrying on business is needed to get his accounts audited if his total turnover,  or gross receipts in business  is more than 1 Crore rupees in any previous year.

If a person doing the profession he is needed to get his books of accounts audited in case total receipt of such profession is more than Rupees 50 Lakhs during the previous year.

Central Government was increased the threshold limit in Finance Act 2020 where a person carrying on business from 1 Crore to 5 crore in cases where:-

  • -Total receipts in cash during the previous year does not more than 5% of such receipts
  • – Total payment in cash   during the previous year does not more than 5% of such payment.

  •  If a person involved in profession & choosing for presumptive taxation U/s 44ADA and claims that:

  • -Last year aggregate turnover sales or gross receipts exceed  Rs.50  lakhs or
  • – Income from such profession is lower than 50% of the gross receipts of the profession  and
  • – his income exceeds the maximum amount which is not chargeable to income tax in any previous year.
  •  he shall get his accounts of such previous year audited by a Chartered Accountant on or before the  specified date.

  • Specified profession  under section 44AA

  • – Chartered Accountant, Cost Accountant
  • -Company Secretary
  • –  Medical profession services provided by doctors
  • -Engineering profession service provided by consulting engineers, technical certification.
  • – Architectural profession
  • -Interior decoration services
  • – Authorised representative
  • -Professional sports
  • -Legal profession
  • -Profession of Advertisement

  •  If a person involved in business & choosing for presumptive taxation U/s 44AD:

  • Tax Audit required where

  • – Total turnover exceed  Rs. 10,00,00,000 during the previous year
  • – Turnover exceed  Rs 2,00,00,000 but up to 10 Croce but the cash receipts and payment is more than 5 percentage of turnover.
  • -If assessee want to  show profit  less than 8 percentage or 6 percentage of turnover
  • How to file TDS on the Sale of Property